Suppose the Tax on Liquor Is Increased So That the Tax

question 192

Multiple Choice

Suppose the tax on liquor is increased so that the tax goes from being a "medium" tax to being a "large" tax.As a result,it is likely that

• A) tax revenue increases, and the deadweight loss increases.
• B) tax revenue increases, and the deadweight loss decreases.
• C) tax revenue decreases, and the deadweight loss increases.
• D) tax revenue decreases, and the deadweight loss decreases.

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Definitions:

DP

An abbreviation that can refer to different concepts depending on the context, such as "Dual Purpose", "Dew Point", or "Distribution Point" in various fields.

Shaft Speed

The rotational speed of a shaft, measured in revolutions per minute (RPM), indicating how fast the shaft is spinning.

Spur Gears

Gears with teeth that are straight and mounted on parallel shafts, commonly used in machinery for transferring motion and power.

Perpendicular

Describes two lines or planes that intersect at a right angle (90 degrees) to each other.